Employees in India have recently taken a major decision by Employees’ Provident Fund Organization (EPFO), which will give the private sector employees more pension benefits. This change has been made under the Employees’ Pension Scheme (EPS-95). The main objective of this decision is to strengthen the economic security of the employees and reduce the pressure of rising inflation.
In this article, we will know in detail what this new decision is, who will benefit from it, and how it will be implemented. Also, we will also discuss its advantages and challenges.
EPFO’s new decision: main point
EPFO has made some significant changes aimed at improving pension for private employees. Let’s see an overview of this scheme:
| Parameter | Description |
| Name of the scheme | Employees Pension Scheme (EPS-95) |
| Current pay limit | ₹ 15,000 |
| Proposed pay limit | ₹ 21,000 |
| Minimum pension | ₹ 1,000 (Demand: ₹ 7,500) |
| Maximum pension | ₹ 10,050 (on the new border) |
| Contribution percentage | Staff: 12%, employer: 8.33% EPS + 3.67% EPF |
| New features | ATM to PF withdrawal, pension from any bank |
Changes in EPS-95: What are the new rules?
1. increase in salary limit
EPFO has proposed to increase the salary limit from ₹ 15,000 to ₹ 21,000. This means that now employees who get high salary will also be able to avail this scheme.
2. Increase in minimum pension
The minimum pension has been demanded to increase from ₹ 1,000 to ₹ 7,500. Although it is still under consideration, millions of pensioners will get relief from its implementation.
3. Contribution limit
Now employees can contribute to EPF up to 12% of their actual salary. Earlier this limit was limited to ₹ 15,000.
4. PF withdrawal from ATM
From 2025, EPFO members will be able to remove their PF funds via ATM card. This feature will be especially useful during emergency.
5. Centralized pension payment system
Now pension can be obtained in any bank account. PPO transfer will not be required.
Pension Calculation Formula
Pension is calculated on the basis of the following formula:
Monthly Pension = Pensionable Salary × Service Period 70
Monthly Pension =
70
Pensionable pay × service period
Example:
If an employee’s salary is ₹ 21,000 and has served for 35 years:
Pension = 21,000 × 3570 = ₹ 10,050 per month
Pension =
70
21,000 × 35
= ₹ 10,050 per month
EPS-95: Benefits and Challenges
Benefit
- More pension: New rules will provide better financial security after retirement.
- Convenient procedure: Features such as PF withdrawal and CPPS make it more useful.
- Relief from inflation: Living will be easier with increasing minimum pension.
Challenges
- Additional contribution: Employees have to make additional contribution to get high pension.
- Long procedure: Application process and approval may take time.
- Limited eligibility: Only employees who attended EPS-95 before 2014 can avail this scheme.
Epfo Higher Pension Scheme: Eligibility and Application Process
Eligibility
- The employee should be a member of the EPS-95 scheme.
- The service period should be at least 10 years.
- Employees contributing over the salary limit will be eligible.
Application process
- Fill the joint option form: submit the form signed by both the employee and the employer.
- Apply on EPFO portal: Complete the online application process.
- Submit additional contribution: deposit the additional amount if necessary.
- Check the status: Keep checking on the EPFO portal regularly.
New features: other reforms of EPFO
1. Profile Update
Now members can update their personal details like name, date of birth etc. online.
2. Eston Plysfrey
Under the new rules, it has now become easy to transfer PF account.
3. Digital Life Certificate
Pensioners can now submit their life certificates through digital medium.
conclusion
These changes made by EPFO can prove to be a major relief for private sector employees. Especially for those who want better financial security after retirement. However, it may take time to implement these changes and some challenges may also come up.
Disclaimer: This article is written only for the purpose of providing information. Official confirmation of changes made by EPFO through the website of the concerned department or notification.
